The cryptocurrency exchange known as Coinbase, which is publicly traded, has been prohibited from providing its services to users in Kazakhstan. Reports from local sources indicate that the Ministry of Culture and Information of the Republic of Kazakhstan has confirmed that the Coinbase website cannot be accessed by local IP addresses.
The reason for the ban on Coinbase is due to allegations that the exchange has violated Kazakhstani laws regarding digital assets. These laws, which came into effect in February 2023, state that companies engaged in the trading of digital currencies, including cryptocurrency trading companies, must obtain a license from the Astana International Financial Center (AIFC). The AIFC is a financial center in Astana, Kazakhstan, responsible for granting national licenses for operation.
Currently, other cryptocurrency exchanges such as Binance, Bybit, Upbit, Biteeu, and ATAIX have obtained licenses from the AIFC, allowing them to operate freely within the country.
According to a Telegram media group known as Finance.kz, Coinbase’s troubles in Kazakhstan started in September, and the government’s decision also affected the Kraken crypto exchange. However, it is worth noting that such bans can often be circumvented through the use of virtual private networks (VPNs).
Other financial platforms associated with cryptocurrencies, such as Interactive Brokers and the New York Mercantile Exchange (NYMEX), have also faced similar blockages in Kazakhstan. However, these bans were lifted after requests were made by the Financial Monitoring Agency.
While the Kazakhstani government maintains a strict stance on crypto exchanges adhering to its laws, the country generally has a positive outlook on cryptocurrencies. This can be seen in previous decisions made by the government regarding digital currencies.
In 2019, the government announced that taxes would not be imposed on cryptocurrency mining activities. The following year, the Kazakhstani government expressed its intention to invest $738 million in crypto mining over the next three years. The country’s first quarterly earnings report for 2022 revealed a revenue of $1.5 million from crypto mining.
Last year, the Ministry of Digital Development, Innovations, and Aerospace in Kazakhstan paved the way for licensed crypto exchanges to open bank accounts in selected banks across the country. The government has also explored the possibility of creating a central bank digital currency (CBDC) in collaboration with Binance’s BNB Chain.
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